Rice farming towns face struggle, lack of water

Jan. 9, 2013 at 11 p.m.Updated Jan. 9, 2013 at 7:10 p.m.

EAGLE LAKE (AP) - Tom Kallina has no fields to till, plant or flood. But his business depends on Texas' rice industry and the likelihood that farmers won't get irrigation water for a second consecutive year threatens to destroy it, along with hundreds of others in his area.

Three-quarters of Texas' rice crop comes from the Colorado River basin, an area that hovers above the national poverty rate and offers few alternatives for employment.

Farmers struggled last year after the agency that oversees and manages Central Texas reservoirs cut off their irrigation supply following a historic drought. With the drought now two years old, the agency voted Tuesday to withhold irrigation water again if Lakes Buchanan and Travis remain below a certain level on March 1.

The decision affects generations-old rice farms, along with myriad businesses that support, rely and contribute to the industry that brings $1 billion into the state annually.

Kallina owns Area Rice Marketing, an Eagle Lake business that acts as a broker between rice farmers and commercial buyers. In an average year, Kallina analyzes and markets about 15,000 acres of rice. Last year, he did only 2,500 acres, and while he also has a rice storage and drying facility, the income from that is not enough to supplement the rapidly failing marketing business.

"I am trying to keep it open by taking money out of my lifelong savings," Kallina said. But with three children in college, "I have to decide at what point in time that stops."

Half-jokingly, he asked friends gathered at a local restaurant if they might be able to hire him to sell crop insurance, and called it "surreal" when during lunch his son, a student at Texas A&M University, emailed him a link with a job posting at the College Station school.

The drought dominates conversation at Tony Taco's restaurant in Eagle Lake, where more than half the 3,700 residents get some income from the rice industry and nearly everyone knows each other. Those gathered Tuesday for the weekly fajita buffet talked about who was drilling wells, who was taking on side jobs and, ultimately, which of them might make it.

"I'm not worried about me. I'm more worried about him," said farmer Craig Guthman, pointing at Kallina.

Guthman noted that he and other farmers can squeak by with crop insurance, which covers about half their losses. Last year, he grew nothing on his 900 acres. Without water, this year will be the same. The insurance won't go a third year though, so like many others, he is paying about $400,000 to drill a well that will allow him to grow about 350 acres of rice even without water from the Lower Colorado River Authority, an investment that will take 20 years of farming to cover.

Chewing on a toothpick, the burly man was baffled by a question about whether a well is a sound investment. His father and uncle grow rice on 2,000 acres. His grandfather and great-grandfather did the same.

"We're going to farm. It's a culture. It's what we do," explained Tom Kelley, whose family has been farming in Eagle Lake since 1897. But Kelley also sells crop insurance on the side and recently opened a smokehouse in town.

Farmers have been growing rice in Eagle Lake, a town about 65 miles southwest of Houston, since 1897. They flood their fields, called paddies, because the water helps the rice grow in the clay-like soil and deters pests. They have helped make Texas the fifth-largest rice grower in the nation, and many feel they are disproportionately shouldering the burden of the drought because they draw from the same reservoirs that supply Austin and its suburbs.

"Rich people shouldn't build mansions in the desert," declared Arthur Etheridge, who sells John Deere equipment in Eagle Lake. "Those lakes were built for agriculture, not recreation."

Clara Tuma, a spokeswoman for the LCRA, said in an emailed statement that the agency understands the difficulties of the drought for people in the lower Colorado River basin, but farmers pay less for water than others and the understanding is that during a drought they are the first to be cut off.

The agency, she added, is committed to increasing the region's water supply and is considering adding reservoirs in the rice-farming areas.

Meanwhile, Jay Davis is looking at more layoffs at his dryer - a facility where farmers dry and store their rice until it is sold. Last year, the dryer never opened. Instead of seven to 10 employees, it now has two full-time workers and one part-time. If it doesn't open this year - an almost certainty if water is cut off - those workers also will be laid off as well.

Davis said he and his partner have taken 50 percent pay cuts, from the storage facility and a rice marketing business they run near Eagle Lake. He has downsized to a car without a loan, reduced his trips to visit his children in New York from four to one and, at age 58, stopped saving for retirement. Every day he checks the lake levels, and he and his wife pray for rain.

The state Legislature, he believes, needs to invest in dams and infrastructure as the population grows and water in the drought-prone region becomes scarce. Still, he can't buy groceries with hopes and dreams.

"I may have to look for something similar in this area in another state, maybe move to Arkansas or Mississippi and look for a place to open up business or go to work for somebody," Davis mused.